Lithuania’s capital, Vilnius, has announced plans to turn the city into a vast open-air cafe by giving over much of its public space to hard-hit bar and restaurant owners so they can put their tables outdoors and still observe physical distancing rules.

The Baltic state, which has recorded 1,344 cases of the coronavirus and 44 deaths, allowed cafes and restaurants with outdoor seating, hairdressers and almost all shops to begin reopening this week as part of a staged exit from lockdown.

But the health ministry has imposed strict physical distancing rules and safety measures. Shops must limit the number of customers at one time, masks will remain mandatory in all public spaces, and cafe and restaurant tables have to be placed at least two metres apart.

That posed a problem for many restaurateurs in Vilnius old town, Senamiestis, a Unesco-listed world heritage site whose narrow streets make it almost impossible to place more than a couple of tables outside – prompting the mayor’s offer.

“Plazas, squares, streets – nearby cafes will be allowed to set up outdoor tables free of charge this season and thus conduct their activities during quarantine,” said Remigijus Šimašius. Public safety remained the city’s top priority, the mayor said, but the measure should help cafes to “open up, work, retain jobs and keep Vilnius alive”.

Eighteen of the city’s public spaces, including its central Cathedral Square, have been opened up for outdoor cafes and restaurants, city hall said, and more are expected to be added as the summer progresses. The move has been welcomed by owners, with more than 160 applying to take up the offer.

“It came just in time,” said Evalda Šiškauskienė of the Lithuanian Association of Hotels and Restaurants, adding that the measure would help members “accommodate more visitors and bring life back to the city streets, but without violating security requirements”.

Vilnius authorities have also given the city’s public health workers €400,000-worth (£350,000) of restaurant vouchers intended both as gesture of thanks for their work and a much-needed stimulus to the city’s cafes.